SELLING WITH KAHLE

IS THE SOLUTION THEM, OR IS IT ME?

------------ BY DAVE KAHLE

IN THIS RAPIDLY changing economy, everyone is looking for a simple fix for dealing with the uncertainty of our economic environment. It seems like few are happy with their situations. And all but a few point their fingers at the changing economy and vibrant competitive environment as the source of their dismay.

Humans must have a genetic inclination to blame things outside of our control for our situations. We lament our fate and cast ourselves as victims. If only someone else would fix it. Maybe the government will make everything good again.

Unfortunately, as long as our gaze is directed at “them” (market conditions that have changed and are outside of our control), we will never free ourselves from the constraints on our income and prosperity. We can’t do anything about “them.”

The real secret to improving our conditions is to work on “us.” James Allen said, “Men are often interested in improving their circumstance, but are unwilling to improve themselves, they therefore remain bound.”

What was true 100 years ago is still true today. Salespeople, sales managers, and executives must look inward for solutions to their problems.

Salespeople must understand that it was OK just a few years ago to “have your own style of selling,” to never invest in your own improvement, to make your living off of your existing relationships. Today, all of these are obsolete ideas that must be changed. It’s time to look inward and work on yourself.

To effectively deal with the changing economy, salespeople must become more strategic and thoughtful about the investment of their sales time, and they must bring value both to the customer and to their employers in every sales call. They must view their jobs as professions, not just jobs, and become serious about improving themselves. In many cases, salespeople will have to gain new skills in working from a home office and running sales calls via phone and video technology.

Likewise, sales managers must stop coddling salespeople who aren’t committed to continuous improvement and greater productivity. They need to hold them accountable for practical expectations of growth and development. They need to put in place practices that call for quantifiable expectations on the part of their sales team, regular measurements, and greater thoughtfulness and strategic planning.

Sales managers must look inward, understanding that their chances of success are dependent on them, not the market, understanding they can do it better, and doing it better brings better results. They must examine their sales forces and use this window of opportunity to weed out salespeople who have no interest in developing and who don’t have the capability to succeed as a professional salesperson. Now is the time to review the bottom third of their sales forces and seek to upgrade.

Sales executives need to recognize that the current state of the economy, and the resulting impact on the attitudes and perspectives of employees, has delivered a oncein-a-lifetime opportunity to make significant changes in the structure of the sales force.

Recall just a little over a year ago. To make wholesale changes in sales territories, account responsibilities, the roles of the inside and outside salesperson, sales management practices, compensation plans, and expectations for continuous improvement—all of these initiatives would have been met with resistance from the majority of the sales force. Today, most are willingly cooperative, aware they can be replaced if they don’t follow your lead.

CEOs and CSOs who look inward and use this window of opportunity to streamline and rationalize their sales systems will increase their productivity and lay the groundwork for disproportional growth when the economy turns up.

The world is full of victims who lament their condition and blame sources outside of their control. Leaders accept their responsibility to look inward and improve themselves.

DAVE KAHLE

Dave Kahle is a leading sales authority, having written 12 books and presented in 47 states and 11 countries. For more information, visit davekahle.com.

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COMPENSATION PLANNING FOR THE YEAR AHEAD

------------ BY SUSAN PALÉ

UNDERSTANDING COMPENSATION is critical to staying competitive in today’s volatile labor market. As we prepare for 2023, real wage growth is a concept that is particularly important.

Overall wages are projected to increase 4.0% or more during 2022. Although this is the largest projected increase in several years, the current inflation rate of 8.5% (the highest recorded in 40 years) results in negative wage growth for many employee groups.

Q. A few of my employees have shown up for work sick. I appreciate their dedication, but I’d rather they not come to work when ill. Can I send them home and require that they use their sick leave? A. Yes, you can. Recognize that there may be reasons why employees are showing up sick that might include: • Not wanting to use sick or paid-time-off leave • Not being able to afford the lost wages due to illness • Fear that the workload will become overwhelming if work is missed • Fear of disappointing the boss

If you do send them home, reassure them that you want them to take the time to recover and that you will help to ensure their work gets done. Remind them that sick leave is offered so that they will stay home when they are sick. And if they are worried about lost wages, try to identify ways for them to make up the time once they return to health.

Consider allowing them to work from home temporarily if that is an option given their job duties and other operational considerations such as security, access to needed information, etc.

Remember, some states and cities require employees receive paid sick time and that some sick time, even if unpaid, is protected time off.

Real wages/income is calculated by dividing the current wage by 1 plus the current inflation rate. For an employee currently making $40,000, the individual’s real income is reduced to $36,866 when the current inflation rate is considered.

Staying competitive requires both short- and longterm planning. Some of the things you’ll need to think about include:

Salary Administration

Organizations frequently spend a lot of time (and money) setting starting salaries for new hires, developing salary ranges to accommodate new positions, and even developing and implementing formal salary structures. All of these are positive steps, but often they are implemented and abandoned. To remain competitive, ongoing salary administration is required. This includes:

SALARY REVIEWS should be performed annually, more frequently when recruiting and/or retention issues occur. Hopefully, you’ve done some market pricing during the year to give you a baseline understanding of salaries in your competitive market(s).

Combined with market pricing information, regular salary reviews will help to identify pockets of salary compression (e. g., new hires making more than long service employees doing the same work), the range of pay for employees performing the same work relative to performance and length of service, and other potential pay equity issues.

SALARY RANGE AND SALARY STRUCTURE REVIEWS are also a critical piece of successful salary administration. If you’ve developed salary ranges or more formal salary structures, you’ve most likely based them on market information. But the market can change

quickly. It is important to review and update those ranges and structures regularly. Affinity HR Group usually recommends this review be done every other year.

SALARY BUDGETS are the third important component to successful salary administration. Many organizations don’t prepare any type of salary budget, but those who want to anticipate future salary expenditures often prepare an annual salary budget that includes: • Performance based and across the board salary increases (more on those below) ee service anniversary. Awarding all increases at once has become a more commonly used approach, since it allows the organization the opportunity to view all employees at once and award increases that align with salary increase budget parameters.

When salary increase budgets are low (they’ve averaged around 3% for the last several years), it can become challenging to award true pay for performance increases. For example, a top performer earning $60,000 might get a 5% increase ($3000). An average performer earning the same might get a 3% increase ($1800). After taxes, etc., there isn’t a lot of difference.

ACROSS-THE-BOARD salary increases are generally given to all employees on a scheduled basis— most often at the end of the calendar year or the organization’s fiscal year. Often, the amount is determined based on the organization’s past performance, rather than determined through an advance salary planning/ budgeting process.

These increases are usually awarded as a percentage of base salary, and all employees generally receive the same percentage.

Giving all employees the same increased amount can perpetuate pay inequities that may exist in an organization.

LONGEVITY or LENGTH OF SERVICE salary increases are based

STAYING COMPETITIVE REQUIRES BOTH SHORT- AND LONGTERM PLANNING.

• Salary increases to address inequities as the result of reviews of paid salaries • Salary increases to address inequities as the result of reviews of salary ranges and/or salary structures • Anticipated payouts under bonus and incentive plans

Salary Increases

Once you’ve completed the basic salary administration activities described above, it’s time to think about salary increases. There are dozens of types of salary increases; some of the most common (and those that affect the most employees) are described below:

PAY FOR PERFORMANCE or MERIT INCREASES are common in all types of organizations. These increases are generally awarded for successful achievement of some measurable criteria. These criteria may be established and communicated in a formal performance review form or by less formal notes, discussions, etc.

Most organizations using a pay for performance increase system will award increases based on some type of schedule—end of year, end of organization’s fiscal year, or employsolely on an employee’s length of service with an organization. There is generally no performance component to these increases, which are often mandated by contractual agreement. These types of increases are most common in government and education.

COST OF LIVING ADJUSTMENT (COLA) salary increases are linked to a rise in the cost of goods and services. They are designed to help employees maintain (rather than increase) their purchasing power.

In the past, these increases have often been awarded to all employees. They are now used less frequently, because of vast differences in local and regional pay markets (e.g., pay in San Jose, Ca., is approximately 41% higher than the national average). The increase in the number of remote workers in multiple locations also reduces the effectiveness of this type of salary increase.

SUSAN PALÉ

Susan Palé, CCP, is vice president for compensation with Affinity HR Group. Reach her at (877) 660-6400 or contact@affinityhrgroup.com.